IN THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
Reportable/Not Reportable
Case no: 16033/2023
In the matter between:
COURTHIEL HOLDINGS (PTY) LIMITED APPLICANT
and
TIRISANO PROPERTY GROUP (PTY) LIMITED
(IN PROV. LIQ.)
(Registration No: 2013/136691/07)
FIRST RESPONDENT
THOMAS CHRISTOPHER VAN ZYL N.O.
cited in his capacity as one the duly appointed joint
provisional liquidators of
TIRISANO PROPERTY GROUP (PTY) LTD
SECOND RESPONDENT
CHAVONNES BADENHORST ST CLAIR
COOPER N.O.
cited in her capacity as one the duly appointed joint
provisional liquidators of
TIRISANO PROPERTY GROUP (PTY) LTD
THIRD RESPONDENT
MUSTAFA MOHAMED N.O.
cited in his capacity as one the duly appointed joint
provisional liquidators of
TIRISANO PROPERTY GROUP (PTY) LTD
FOURTH RESPONDENT
THE COMPANIES AND INTELLECTUAL
PROPERTY COMMISSION
FIFTH RESPONDENT
Coram: SALLER AJ
Heard: 24 April 2025, 5 May 2025, 7 May 2025 and 17 September 2025
Judgment: 18 September 2025
JUDGEMENT
Saller AJ
[1] The present application is the latest instalment in a long history o f litigation
arising from the financial difficulties experienced by Tirisano Property Group
(Pty) Ltd (“Tirisano”), a property-owning company.
[2] On 8 May 2024 this Court, per Blumberg AJ, placed Tirisano in provisional
liquidation under Cha pter 14 of the Compa nies Act 61 of 1973 (“the old
Companies Act” and “the liquidation”) on application by the Emalahleni Local
Municipality (“ELM”) , after dismissing an appli cation by one of Tirisano’s
directors, Mr Schipper, for an order placing Tirisano in business rescue under
section 131(4) of the Companies Act 71 of 2008 (“the Companies Act” and
“the first Cape Town BR application”) . Leave to appeal the dismissal of the
first Cape Town BR application has since been refused by both this Court and
the Supreme Court (“SCA”) of Appeal.
[3] The current second to fourth respondents (“the provisional liquidators”) were
formally appointed as Tirisano’s provisional liquidators on 20 May 2024. On
11 June 2024 their powers were extended by order of this Court per
Andrews AJ, inter alia to litigate and conduct an enquiry under sections 417
and 418 of the old Companies Act.
[4] On 19 June 2024, one day before the initial return day of the liquidation, TGM
Properties and Consulting (Pty) Ltd (“TGM”) applied in the Mpumalanga
Division of the High Court in Middelburg for an order placing Tirisano in
business rescue (“the Middleburg BR application”). TGM is a shareholder of
Tirisano.
[5] The Middleburg BR application put the proverbial spanner in the works of the
liquidation: u nder section 131(6) of the Companies Act, liquidation
proceedings are suspended once an application for business rescue is filed.
[6] On the liquidation’s further return day on 20 June 2024 , this Court per Van
Leeve AJ extended the rule nisi and postponed the matter to give Tirisano the
opportunity to transfer the Middleburg BR application to this Division.
[7] On the liquidation’s third return day on 22 August 2024, this Court per
Sidaki AJ made orders which included joining the current applicant, Courthiel
Holdings (Pty) Limited (“Courthiel”) as an applicant in the liquidation and
further extending the return day. Courthiel is Tirisano’s main creditor, with a
common cause debt owed of approx. R250 million.
[8] On the liquidation’s fourth return day on 24 October 2024 , this Court per
Allie J made orders which included granting ELM leave to withdraw as
applicant in the liquidation (which ELM formally did on 26 November 2024,
leaving Courthiel as the sole applicant ), and further extending the return day to
24 April 2025. She found that on the papers before her, she was unable to
determine whether the Middlebu rg BR application constituted an abuse of
determine whether the Middlebu rg BR application constituted an abuse of
process and that the Middleburg High Court had to be given the opportunity to
determine that application before the liquidation could be finalised in this
Division.
[9] In the run-up to the liquidation’s fifth return day, a number of things happened.
[10] First, on 19 December 2024 Tirisano’s provisional liquidators applied for the
liquidation of TGM, the applicant in the Middleburg BR application. On
14 March 2025, TGM was placed in provisional liquidation. The effect of this
is that pending the extension of TGM’s provisional liquidator’s powers by a
court or by creditors at the second creditors meeting , the Middleburg BR
application cannot be withdrawn, or moved to this Division for joint
determination with the liquidation. The Middleburg High Court has also, in the
meantime, refused to make a final determination in the absence of the TGM’s
provisional liquidators.
[11] Second, on 24 February 2025 Courthiel applied to convert the liquidation (in
which it is now the only applicant) into business rescue proceedings under
section 131(7), read with sections 131(4) and (5) of the Companies Act. This is
the application I am currently seized with , and I refer to it as “the current
application”. Until the eve of the hearing, there was no substantive opposition
(a notice of application to join / intention to oppose filed by one Mr Brown not
being supported by affidavit).
[12] Third, on 23 April 2025, the day before the fifth return day , the provisional
liquidators filed a notice of opposition to the current application . On the
morning of the fifth return day, they filed an opposing affidavit and applied for
condonation for its late filing in the face of Courthiel’s opposition . I granted
condonation with costs reserved, and further postponed the matter (including
an extension of the liquidation’s rule nisi) subject to an urgent timetable for the
filing of papers. Such papers were filed, as well as a n application by the
provisional liquidators for the striking out of parts of Courthiel’s reply.
provisional liquidators for the striking out of parts of Courthiel’s reply.
[13] On 5 May 2025 the striking out application was argued. On the same day , I
refused the application for striking out with costs reserved , stood the matter
down to 7 May 2025, and granted the provisional liquidators leave to file a
further affidavit dealing with certain matters raised in Courthiel’s reply,
including alternative relief sought by Courthiel in reply that the provisional
liquidators be ordered to personally pay the costs occasi oned by their
opposition to the current application . Also on that day, Mr Brown filed a
notice withdrawing his opposition, such as it was.
[14] On 7 May 2025 I heard argument on the merits of the current application. It is
common cause that if the current application is refused, the return day for the
liquidation must be further extended and the matter be postponed for
determination on a future date.
[15] Shortly before judgment was to be delivered, Courthiel sought to place further
evidence before the Court , a request the provisional liquidators opposed. I
directed Courthiel to make formal application under rule 6(5)(e) (“the 6(5)(e)
application”), including in its papers the new material sought to be introduced,
and for any opposing party to simil arly identify evidence it would seek to have
admitted in answer in the event that the application was granted. This
interlocutory application was argued on 17 September 2025 . After hearing
argument, I made an ex tempore order granting leave for the filin g of the
further affidavits.
[16] I propose dealing with the determination of the current application as follows:
first, the applicable legal framework ; second, Courthiel ’s case on the papers;
and, lastly, the question of costs.
THE LEGAL FRAMEWORK: SECTION 131 OF THE COMPANIES ACT
[17] The legal framework for the determination of the current application , as it is
relevant to the present matter, is set out in Part A of Chapter 6 of the
Companies Act.
[18] Under section 131(1) , an “ affected person ” may apply to court f or an order
placing a company under supervision and commencing business rescue
proceedings. Under section 131(7) the court may also make such an order at
any time during the course of liquidation proceedings relating to that company.
[19] What is an “ affected person ” is defined in s ection 128(1) (a). It is common
cause that, as creditor of Tirisano, Courthiel is an affected person as defined.
[20] Under section 131(4)(a), a court seized with an application for busines s rescue
may make such an order if it is satisfied that certain preconditions are met.
These include that the company is financially distressed – it is common cause
that this applies to Tirisano . It is a further express requirement of
section 131(4) that the court be satisfied that “ there is a reasonable prospect
for rescuing the company”. That is the key dispute in the present matter.
A reasonable prospect
[21] In Oakdene, the SCA considered what is m eant when section 131(4) says that
an applicant must show a “ a reasonable prospect ” of rescuing the company .
Brand JA accepted that the bar had been lowered from that imposed by the
erstwhile test of “ reasonable probability” set out in section 427(1) of the old
Companies Act. But a bar nevertheless remains:
“On the other hand, I believe it requires more than a mere prima facie case or
an arguable possibility. Of even greater significance, I think, is that it must be
a reasonable prospect – with the emphasis on ‘reasonable’ – which means that
it must be a prospect based on reasonable grounds. A mere speculative
suggestion is not enough. Moreover, because it is the applicant who seeks to
satisfy the court of the prospec t, it must establish these reasonable grounds in
accordance with the rules of motion proceedings which, generally speaking,
require that it must do so in its founding papers.”1
1 Oakdene Square Properties (Pty) Ltd and Others v Farm Bothasfontein (Kyalami) (Pty) Ltd and Others
2013 (4) SA 539 (SCA) (“Oakdene”) para 29.
[22] The SCA further endorsed the conclusion of Van der Merwe J in Propspec
Investments2 that what is required is tha t the an applicant “ place before the
court a factual foundation for the existence of a reasonable prospect that the
desired object can be achieved .”3 While the applicant need not to put up
detailed financial information that it proposes should be included in a business
rescue plan, 4 it must establish on the record the grounds for what it says are
reasonable prospects that the company can be rescued.5
Rescuing the company
[23] Turning then to w hat is meant by “ rescuing the company ”, this is defined in
section 128(1)(h), read with subsection (1)(b)(iii), to mean “restructuring [the
company’s] affairs, business, property, debt and other liabilities, and equity in
a manner that maximises the likelihood of the company continuing in existence
on a solvent basis or, if it is not possible for the company to so continue in
existence, results in a better return for the company’s creditors or shareholders
than would result from the immediate liquidation of the company.”
[24] In Oakdene,6 Brand JA considered these provisions as well. He explained that
business rescue proceedings had to be aimed at the achie vement of two
objectives, or goals, namely:
“ a primary goal, which is to facilitate the continued existence of the company
in a state of solvency and, a secondary goal, which is provided for as an
alternative, in the event that the achievement of the primary goal proves not to
be viable, namely, to facilitate a better return for the creditors or shareholders
of the company than would result from immediate liquidation.”
2 Propspec Investments (Pty) Ltd v Pacific Coast Investments 97 Ltd and Another 2013 (1) SA 542 (FB)
(“Propspec”).
3 Oakdene para 30, with referred to Prospect Investments paras 11 and 15
4 This will be determined by the business rescue practitioner after s/he conducts the mandated
4 This will be determined by the business rescue practitioner after s/he conducts the mandated
investigation under section 141 of the Companies Act: Oakdene para 31.
5 Oakdene para 31, with reference to Prospect Investments para 11
6 Oakdene par 23.
[25] Brand JA grappled with the difficult question whether the se two objectives are
true and equal alternatives, or whether business rescue proceedings had to aim ,
in the first instance , at the continuation of the company in a solvent state.
While the dictionary definitions of the words might suggest that an applicant
had to show in the first instance that there was a reasona ble prospect of
returning and continuing the company in a state of solvency, he found that
section 128 of the Companies Act gave the terms “rescue” and “rehabilitation”
their own meaning. Consequently, he held that “the achievement of any one of
the two g oals referred to in s 128(1)(b) would qualify as ‘business rescue’ in
terms of s 131(4)”,7 and that an applicant had to establish merely a reasonable
prospect “of achieving any one of the two goals contemplated in s 128(1)(b) on
the facts of this case.”8
[26] However, this did not mean that business rescue proceedings in pursuit of the
secondary goal can be regarded as an “alternative, informal kind of winding -up
of the company , outside the provisions of [the Companies Act] ”. Brand JA
explained that “A fortiori, I do not believe that business rescue was intended to
achieve a winding -up of a company to avoid the consequences of liquidation
proceedings.”9
[27] Consequently, where an applicant relies on a reasonable prospect of achieving
the secondary goal, it must demonstrate a real comparative advantage flowing
from the choice of business rescue proceedings over liquidation.
The court’s discretion
[28] Before turning to the case at hand, I mention one other aspect. The Companies
Act has set out clear precondi tions that must be met before an order placing a
company in business rescue may be made. I do not believe that this Court may,
under the guise of the discretion afforded to it , refuse to engage fully with the
7 Oakdene para 27.
8 Oakdene para 28.
9 Oakdene para 33.
question whether those preconditions are met. And if they are not met, there
can be no question of making such an order merely on the grounds that it
would be just and equitable to do.
[29] In Oakdene Brand J considered the nature of the discretion afforded to the
court, and cautioned against equivocation:
“In a case such as this, the court’s discretion is bound up with the question
whether there is a reasonable prospect for rescuing the company. The other
pertinent requirement in s 131(4), namely, that the company must be
financially distressed, seems to turn on a question of fact. As to whether there
is a reasonable prospect of rescuing the company, it can hardly be said, in my
view, that it involves a range of choices that the court can legitimately make; of
which none can be described as wrong. On th e contrary, as I see it, the answer
to the question whether there is such a reasonable prospect can only be ‘yes’
or ‘no’. These answers cannot both be right.”
[30] It follows that a party cannot come to court seeking to convince the court of the
equities of the matter while referring the hard factual questions raised by the
statutory test to the business practitioner to resolve in due course.10
COURTHIEL’S CASE ON THE PAPERS
[31] Courthiel’s case for business rescue is addressed somewhat tersely in the
founding affidavit of Mr Wright under the heading Business Rescue Proposal .
It amounts to this: Tirasano owns multiple properties, of which a mixed -use
building in Witbank (“the Witbank property”) i s the most valuable. The
residential component of the Witbank property provides student
accommodation. In the Middleburg BR application, it appears Mr Mogorosi
attached a valuation to his papers which valued the Witbank property at
10 See for example this Court’s remarks in Nedbank Ltd v Bestvest 153 (Pty) Ltd, Essa and Another v
Bestvest and Another 2012 (5) SA 497 (WCC) para 41; Zoneska Investments (Pty) Ltd t/a Bonatla
Bestvest and Another 2012 (5) SA 497 (WCC) para 41; Zoneska Investments (Pty) Ltd t/a Bonatla
Properties (Pty) Ltd v Midnight Storm Investments 386 Ltd [2012] 4 All SA 590 (WCC) para 48; both
authorities endorsed by Blumberg AJ para 100.
R 392 million in June 2024, with Tirasano’s other properties valued at “some
tens of millions more”.11
[32] The debt owed to Courthiel stands at around R 250 million, increasing every
month by about R 1.5 million in interest. 12 Mr Wright points out that if the
Witbank proper ty is sold “ for an amount close to the figure suggested by
Mr Mogorosi, the proceeds will be sufficient to satisfy Courthiel’s claim, and
the claims of Tirasano’s ot her small creditors.” This would allow Tirasano to
retain one or more of its other properties , Mr Wright suggests, and thus
continue to operate albeit on a much smaller scale. Even if that ultimately
proved not to be feasibl e and all of Tirasano’s proper ties had to be sold, “ its
creditors would do better than if the liquidation is only finally confirmed in
some years’ hence.”
[33] It appears from this that Courthiel’s case is that there are reasonable prospects
that either the primary or the secondary statutory goal may be achieved through
placing Tirisano in business rescue.
The primary goal: The likelihood of Tirisano continuing in a solvent state
[34] Courthiel’s founding affidavit gives no indication of the amount of Tirisano’s
current indebtedness besides its debt to Courthiel , which is backed by “several
mortgage bonds ” against the Witbank property ,13 nor Tirisano’s overall
financial position, nor its current or anticipated operational needs.
[35] Instead, Courthiel refers14 this Court to the Judgment of Blumberg AJ, saying it
“bears close reading ” and comprehensively deals with such issues. The
founding affidavit does not traverse the Blumberg Judgment, beyond
highlighting its findings that neither Tirisano nor its director Mr Schipper
substantively oppose d the liquidation and that Tirisano accepted that it is
11 FA para 42 p 809.
12 FA para 12 p 802; para 39 p 808.
13 FA para 12 p 802.
14 FA para 18 p 803.
financially distressed , that Courthiel’s opposition to the first Cape Town BR
application was a real obstacle to its suc cess; and that delay has been a
prominent feature of Mr Schipper’s conduct.
[36] Courthiel submits that I am bound under the doctrine of precedent by the
Blumberg Judgment unless I hold it to be clearly wrong. I have no reason to
disagree with Blumberg AJ’s compelling Judgment, and no difficulty with the
proposition that I am bound by his findings of fact and law that form part of the
ratio decidendi which led him to make the orders he did – including dismissing
the first Cape Town BR application and placing Tirisano in provisional
liquidation.
[37] That does not mean that the factual background which Blumberg AJ traversed
in his Judgment (in an application to which neither Courthiel nor the
provisional liquidators w ere parties) forms part of Courthiel’s case in these
proceedings. Despite my raising this issue at the hearing, the provisional
liquidators nevertheless did not complain of the manner in which Courthiel
presented its case . I am therefore prepared to regard all facts set out by
Blumberg AJ in his Judgment to be common cause between the parties before
me unless the current papers evidence the contrary.
[38] Turning, then, to the Witbank property that lies at the heart of Courthiel’s
proposed rescue of Tirisano, the Blumberg Judgment sets out the following
facts (footnotes omitted):
“The Witbank property
[21] Tirisano is the registered owner of 15 properties.
[22] Six of these are managed as one commercial unit, and together make up
the Witban k property. The Witbank property is Tirisano’s only income -
producing asset, and by far its most valuable, substantially eclipsing the
combined value of its other properties.
[23] The Witbank property comprises a mixed -use retail component on the
ground floor, and a residential component on the upper seven floors.
[24] The residential component is dedicated to student accommodation,
known as the Khayalethu Student Residences (‘Khayalethu’).
[25] Khayalethu is occupied by students of the Tshwane University of
Technology (‘TUT’) and of the Nkangala TVET College (‘Nkangala’). The
majority of these students are funded by the government bursary scheme
managed by the National Studen t Financial Aid Scheme (‘NSFAS’). NSFAS
pays the institutions in question (TUT and Nkangala) for the provision of
accommodation to the students. The institutions are in turn obliged to pay
Tirisano.
[26] As will be seen, ongoing difficulties in obtaining payment from TUT and
Nkangala have contributed to Tirisano’s financial distress.
[27] In his papers in the business rescue application, Mr Schipper says that
the market value of the Witbank property is approximately R365 million –
R95 million for the retail component, and R270 million for the residential
component.
[28] There are difficulties with this valuation that I will come to. It suffices
for now to mention that the bulk of the value in the Wit bank property – and
hence in Tirisano’s balance sheet – lies in the income stream attributable to
Khayalethu (an income stream that, as will be seen, has not proved consistent
or reliable enough to sustain the provision of basic municipal services such as
electricity to the Witbank property).
[29] Three mortgage bonds securing a combined indebtedness of
R165 million are registered over the Witbank property in favour of Courthiel.
[30] In his papers, Mr Schipper says that at present “a capital amount of
R170 million” is owed to Courthiel by Tirisano. For its part, Courthiel alleges
that it is owed R239.5 million by Tirisano.
[31] The difference between the two amounts is attributable to accumulated
interest and other agreed charges.
[32] In his repl ying affidavit, Mr Schipper refers to a “factual dispute”
concerning the amount of Tirisano’s debt to Courthiel. I do not consider there
to be one; but even if there were, Plascon -Evans would apply in favour of
Courthiel’s version. I accordingly intend to approach the matter on the basis
that Tirisano’s debt to Courthiel – which, I stress, is admittedly due and
payable – is R239.5 million; and indeed this is the basis on which
Mr Schipper’s counsel argued the matter.”
[39] Blumberg AJ then proceeds to consider the case put up by Mr Schipper for
business rescue in the first Cape Town BR application, which Courthiel at the
time opposed. Mr Schipper’s primary case was based on a sale of some of
Tirisano’s smaller properties an d a proposed restructuring of its debt to
Courthiel which would allow the Witbank property to continue as a going
concern under the control of a business rescue practitioner.
[40] Courthiel opposed such a restructuring of debt. This effectively put the death -
knell into Mr Schipper’s proposal, given what Blumberg AJ found to be
Tirisano’s “chronic, if not terminal ” difficulties in obtaining alternative
finance, arising from Tirisano’s “inability to procure formal, bankable leases ”
for the Witbank property’s student accommodation (see paras [106] to [108] of
the Blumberg Judgment.)
[41] It appears Mr Schipper then changed tack in reply and presented an alternative
proposal to achieve the primary goal , premised upon the sale of the Witban k
property. This is dealt with from para [111] in the Blumberg Judgment – I
emphasise his factual findings that are also relevant to the determination of the
current application:
“[111] As to the case in reply (which centred around selling the Witbank
property), the starting submission was that the market value of the Witbank
property was in the order of R365 million ; and accordingly that the sale
thereof in business rescue would comfortably allow for the settlement of all of
Tirisano’s debts. This alleg ed market value was based on a July 2021
valuation report attached to the founding affidavit.
[112] As was accepted by counsel for Mr Schipper in oral argument,
however, this valuation report cannot be taken as a reliable indicator of market
value. In the first place, it is nearly three years out of date . In the second, it is
premised on the assumption that there are formal leases in place in respect of
the student accommodation component of the Witbank property (Khayalethu) –
when, on Mr Schipper’s ow n case, there are not. It matters not whether this
assumption held true at the time that the valuation report was prepared (in July
2021). Because even if it did, it no longer does. Again, counsel for Mr
Schipper fairly accepted this.
[113] The alter native valuation proposed – not on the papers, but in oral
argument – was R160 million. This was based on the combined value of the
mortgage bonds registered over the property in favour of Courthiel.
[114] It is by no means clear to me that a sale of the Witbank property for that
amount – even combined with the hoped-for recovery of arrear rentals owed by
TUT and Nkangala – would suffice to pay Tirisano’s debts. But I put that
aside.
[115] The more fundamental difficulty is that there is no evidence – in the
form of a valuation report or otherwise – to support this alternative valuation,
which is in the circumstances speculative . I do not see why the combined
value of the mortgage bonds registered over the Witbank property (the most
recent of which was in 2017) can be taken as a reliable indicator of present
market value, particularly not in circumstances where the post -mortgage
performance of the rental enterprise conducted on the Witbank property has
proved so lacking (more on this below).
[116] …
[117] There is moreover no indication on the evidence that anyone has
expressed any interest in purchasing the Witbank property. To contend, as Mr
Schipper does, that this commercial property can be sold for R160 million – in
circumstances where (i) there are no formal lease agreements in place, and (ii)
the rental enterprise conducted thereon has over time proved incapable of
generating sufficient cash even to keep the lights turned on – amounts in my
view to pure speculation.
[118] To conclude: Mr Schipper’s case for business rescue rested heavily on
the contention that Tirisano is factually solvent. It was suggested that this is
common cause, but this is not so. The contention that Tirisano is factually
solvent is in the end premised on a value being placed on the Witbank property
that is unsupported by the evidence, and that is arbitrary and speculative.”
[42] Returning to Courthiel’s papers in the current application, its primary case is
remarkably similar to what appears to have been Mr Schipper’s proposal put up
in reply in the first Cape Town BR application – the main difference being that
Courthiel relies on a valuation report which Courthiel says is dated June 2024 ,
that was attached to the affidavit of Mr Schipper’s co -director in Tirisano,
Mr Mogorosi, in the Middleburg BR application (“the 2024 valuation”).
[43] The 2024 valuation (in an amount of R 396 million) places a similar value on
the Witbank property as did the 2021 valuation (in an amount of R 365 million)
that was on the record before Blumberg AJ, which he found to be unreliable
and speculative. Courthiel does not attach the 2024 valuation to its papers in
the current application , and does not traverse its content beyond stating the
valuation amount.
[44] Courthiel also does not address the question which urgently presents itself,
namely whether the key shortcoming which Blumberg AJ identified in relation
to the 2021 valuation report (that is, that it was based on an assumption of
formal leases being in place , when that did not appear to be the case ) had been
addressed in the 2024 valuation.
[45] Courthiel does attach Mr Mogorosi’s founding affidavit in the Middleburg BR
application to its own founding affidavit , as part of annexur e “V”
(unfortunately without, in turn enclosing the June 2024 valuation which is
annexure FA8 thereto). The contents are not traversed in Courthiel’s papers in
the current application, and it is not clear to what extent Courthiel aligns itself
with Mr Mogorosi’s averments in an application it oppose d. The authority of
Swissborough Diamond Mines15 is well established to the effect that:-
“Regard being had to the function of affidavits, it is not open to an applicant or
a respondent to merely annexe to its affidavit documentation and to request the
Court to have regard to it. What is required is the identification of the portions
thereof on which reliance is placed and an indication of the case which is
sought to be made out on the strength thereof. If this were not so the essence of
our established practice would be destroyed. …”
[46] Relying on Swissborough Diamond Mines , in the matter of Engen Petroleum
Limited v Webrref Trading 16 the court, referring to the incorporation of
affidavits and documentation solely by reference, stated as follows:
“One would think that the proposition only has to be stated for it to be rejected.
A formulation as broad as this in an affidavit fails to define the issues between
the parties and does not place the essential evidence before the Court seized
with the matter. Neither the Court nor the other party will know prior to the
hearing what is in issue.”
15 Swissborough Diamond Mines (Pty) Ltd and Others v Government of the Republic of So uth Africa
and Others 1999 (2) SA 279 (T) at 324F-G.
16 Engen Petroleum Limited v Webrref Trading No. 31 CC t/a Elm Street Service Station and Another
[2017] ZAGPJHC 192 para 38.
[47] The principle has been endorsed by our highest courts.17
[48] Suffice to say that after a brief perusal of Mr Mogorosi’s affidavit, it is clear
from what he says there that the question of a long-term lease between Tirisano
and the National Student Financial Aid Scheme (“NSFAS”) relating to the
student accommodation in the Witbank property – what Blumberg AJ referred
to as bankable leases – remains key to the 2024 valuation of the property, but
also that at the time of his affidavit such a lease had not been concluded.
[49] In answer in the current application , the provisional liquidators rely o n and
attach Courthiel’s own affidavit filed in response to Mr Mogorosi in th e
Middleburg BR proceedings , complaining that in those proceedings Courthiel
“held a diametrically opposing view ”18 to what it adopts in the current
proceedings, namely that in the earlier proceedings it was of the view that
business rescue was not the appropriate remedy to deal with Tirisano’s
undisputed financial distress.
[50] Courthiel’s about-turn in its attitude towards business rescue proceedings is not
dispositive. Whether or not an order placing Tirisano in business rescue is the
appropriate relief is for this Court to determine. Here, I am concerned with the
factual basis on the papers potentially giving rise to a reasonable prospect of
rescuing Tirisano within the meaning of sections 128 and 131 of the Companies
Act.
[51] The provisional liquidators do not engage with the 2024 valuation in their
answer. H owever, it is clear they deny its conclusion when they say that the
market value of the Witbank property is far less than the debt owed to Courthiel
– which it is common cause presently amounts to some R 250 million.
17 Minister of Land Affairs and Agriculture and Others v D & F Wevell Trust and Others 2008 (2) SA
184 (SCA) para 43; Genesis Medical Aid Scheme v Registrar, Medical Schemes and Another 2017 (6)
SA 1 (CC) para 171.
18 AA para 40 p 1096.
[52] In support , the provi sional liquidators put up an affidavit of one of their
appointed service providers who is employed to maintain and administer the
Witbank property , Mr Mitchell. Mr Mitchell says that he is aware that
Courthiel’s Mr Wright has received offers for the Witba nk property of
approximately R 170 million, and he, Mr Mitchell has received an oral offer
from an unnamed person in an amount of R 175 million. Mr Mitchell says this
latter offer was put to Courthiel, who rejected it as too low.19 This is not denied
in reply, other than through the assertion of Mr Wright on behalf of Courthiel
that he is “aware of interest in the property at a price substantially more than
that referred to Mr. Mitchell” 20 – an averment so vague that it does not
dislodge Mr Mitchell’s evidence.
[53] In reply, Courthiel also faults the provisional liquidators for failing to obtain a
proper valuation of the Witbank property,21 which these explain, at least in part,
by saying that Courthiel has refused their request to approach estate agents to
market the property. 22 Be that as it may, it loses sight of the fact that it is
Courthiel as applicant who must put up a factual basis that satisfies this Court
that there is a reasonable prospect of rescuing the company.
[54] Courthiel further challenges Mr Mitchell’s expertise t o value the Witbank
property.23 I do not understand Mr Mitchell to hold himself out as an expert on
property valuation , but to be putting up facts of which he has knowledge
regarding the interest expressed by potential buyers in the Witbank property.
The effect of that evidence is no more – and no less – than to demonstrate the
value which the Witbank property might realise in a sale. This calls for an
explanation of the significant discrepancy between the value of the Witbank
property which Courthiel su ggests in its founding papers might be achieved
(close to R 396 million) and the interest, such as it is, which has been shown in
(close to R 396 million) and the interest, such as it is, which has been shown in
19 Mitchell para 3 p 1176.
20 RA para 31 p 1213; paras 55-57 p 1218.
21 RA para 56 p 1218.
22 Further affidavit Van Zyl para 6 p 1303.
23 RA para 55 p 1218.
the property to date by potential purchasers (no more than R 175 million).
Courthiel does not take up that invitation in reply.
[55] Instead, its response is say that “ the only real way to test what [the Witbank
property] is worth is to try to sell it ”.24 That is true only in the most literal
sense – and of no assistance to this Court in determining whether the
requirements for the making of an order placing Tirisano in business rescue are
met.
[56] I therefore proceed on the basis that the value which the Witbank property may
fetch if sold is in the region of R 175 million.
[57] Overlooking, for the moment, the general rule that a party is not allowed to
make out their case in reply, Courthiel’s further case regarding Tirisano’s
financial position in its replying affidavit is the following: it points to an
improved condition of the Witbank property and improved te nant si tuation
(presumably, compared to the situation Blumberg AJ laid out);25 it says that the
provisional liquidators have collected R 33 million in rental which is ceded to
Courthiel;26 it refers to Tirisano’s claims in respect of rental owed in an amount
of R 95.1 million according to Mr Mogorosi;27 and it refers to Courthiel’s other
properties, and their valuation 28 by Mr Mogorosi (the unbonded properties are
said to be worth R 43 million) and by Blumberg AJ (who found that there was
equity of R 6.8 million in the bonded properties, and accepted a valuation of the
unbonded properties of just under R 43.8 million).
[58] In respect of the current condition of the Witbank property and current
occupancy, that would have been taken into account by prospective purchasers
who, on the evidence before me, have been prepared to offer R 175 million for
the property in its current condition.
24 RA para 57 pp 1218.
25 RA para 31 pp 1212/3.
26 RA para 11 p 1205; para 33 p 1213.
27 RA para 33 p 1213.
28 RA para 32 p 1213.
[59] In respect of Tirisano’s outstanding claims, Blumberg AJ noted that he was
unable to determine the exact amounts of such claims, but he approached the
matter on the basis that some R 56 million were owing to Tirisano in respect of
student accommodation (para 35 of his Judgment). Courthiel does not begin to
explain on what basis Mr Mogorosi arrives at a much higher figure , and this
must be regarded as speculative.
[60] Courthiel says that Tirisano’s income collected since June 2024 (R 33 million
and R1.5 million) excludes accrued amounts,29 and I proceed on the basis that
Tirisano’s claims remain as they were on the papers before Blumberg AJ, with
its income since then constituting an asset in addition to such claims.
[61] As regards claims against Tirisano, on the other hand, the replying affidavit
identifies various creditors,30 but provides no detail regarding their claims. It is
the provisional liquidators who put up a list of creditors in their answering
papers,31 indicating debts of some R350 million, which Courthiel does not
dispute in reply.
[62] It further appears that Tirisano has attempted to settle some of these debts,
including through making payments without the knowledge and consent of the
provisional liquidators .32 I do not take account of these payments which are
likely neutral in a balancing of Tirisano’s assets and liabilities : if Tirisano has,
since the Blumberg Judgment, applied some of the assets he took into account
to paying its liabilities to which he also had regard, that does not advance
Courthiel’s case before me.
[63] Courthiel does not take account of the costs incurred by the provisional
liquidators to date, which on Courthiel’s own version are very significant, and
does not anticipate the likely costs of the proposed business rescue in the
29 RA para 28 p 1270.
30 RA para 7 p 1204.
31 AA para 8 p 1088; annexure ‘TVZ4’ p 1139.
32 AA paras 15-19 pp 1090-1091; paras 20-23 pp 1091-1093.
future, including the costs of recovering amounts owed to Tirisano which
Courthiel says the business rescue practitioner can achieve – presumably
through litigation for which funds must be made available – and how such costs
may be paid.
[64] When all of the above is taken into a ccount, it is far from clear on what basis
Courthiel submits that there is a reasonable prospect of returning Tirisano to
solvency “such that all creditors can be repaid ”,33 and thereafter continuing
Tirisano’s business in a solvent state . Courthiel says that Tirisano has
“unbonded property worth approximately R 43 million which can be sold, one
by one, to settle the creditors and restore the property to sol vency”.34 It also
points out that so long as even one property remains, Tirisano will be restored
to solvency.35 That is so – but there is little by way of evidence on the basis of
which I might be satisfied that there is a reasonable prospect of this eventuality
coming to pass.
[65] Courthiel somewhat coyly suggests that if the business practitioner finds it
“necessary for Courthiel to abandon a portion of its claim in o rder to ensure
that other creditors’ interests are covered, that may well be done ”.36 That falls
far short of the kind of undertaking I might take into account in balancing the
evidence to determine whether or not to make an order placing Tirisano under
business rescue.37
[66] Simply put, it is not enough for Courthiel to posit that a business rescue plan
may aim at the successive sale of Tirisano’s properties to satisfy its debts. It
must put up a factual foundation , in accordance with the accepted rules of
motion proceedings, on the basis of which th is Court can be satisfied that the
33 RA para 50 p 1216.
34 RA para 57 p 1218.
35 RA para 57 p 1218.
36 RA para 51 p 1217.
37 This calls to mind the “spes of a commitment” which Eloff AJ discounted in Southern Palace
Investments 265 (Pty) Ltd v Midnight Storm Investments 386 (Pt) Ltd 2012 (2) SA 423 (WCC) para 18
as irrelevant to the question before the court whether an order placing the company in business rescue
should be made.
proposed path has at least a reasonable prospect of success in restoring Tirisano
to solvency and continuing its business in a solvent state. On the papers before
me, I am not so satisfied.
The secondary goal: a better return for creditors
[67] Turning then to the secondary goal, there is no denying that Courthiel’s case
has intuitive appeal, in circumstances where it is common cause that the
Middleburg BR proceedings, and consequently, the liquidation proceedings in
this Division, will not be finally determined in the near future.
[68] The unfortunate lack of clarity about the way forward in the liquidation is due
at least in part to the nature of things – TGM’s provisional liquidators were
appointed on 17 April 2025 (after TGM was provisionally liquidated on 14
March 2025), and at the time of the main hearing on the merits on 7 May 2025,
they had not yet had an opportunity to investigate TGM’s financial position nor
to consult with TGM’s director Mr Morogosi. An extension of their powers in
order to participate in the Middleburg BR application on behalf of TGM can
only be achieved after the second creditors’ meeting or on application to court
for that purpose.
[69] It appears from the most recent affidavits in the rule 6(5)(e) application that
TGM’s liquidation is opposed , in turn causing a likely delay in the second
creditors meeti ng. Further, that TGM’s provisional liquidators have still not
been granted e xtended powers , and it is not clear whether they have sought
such powers.
[70] The recent affidavits also confirm that the Middleburg BR application remains
pending. There is some dispute as to the precise grounds for that application’s
recent return day being struck from the roll , the reasons for the order not yet
being available, but the parties were ad idem that it arose, at least in part, from
the inability of TGM’s liquidators to file papers on TGM’s behalf without their
powers being extended. With the Middleburg BR application in limbo, the
powers being extended. With the Middleburg BR application in limbo, the
liquidation, too, cannot be finalised.
[71] Courthiel frankly says that it would prefer the immediate liquidation of
Tirisano. But that is not open to it in the present circumstances. So, it says, it
is forced to choose between business rescue now, and moving for the final
liquidation of Tirisano on an unknown date many months, possibly years, in the
future. Given that unhappy choice, it asks for business rescue.38
[72] The crux of Courthiel’s argument is that a business rescue which can proceed
immediately will, one might say axiomatically, be in the interest s of creditors
when weighed against liquidation proceedings that can only proceed at an
uncertain but distant point in the future.
[73] In argument, Courthiel placed emphasis on the word “ immediate” in
section 128(1)(b)(iii) of the Companies Act , which qualifies the liquidation
proceedings against which business rescue is to be measured in satisfaction of
the secondary goal . The implication is that where, as here, immediate
liquidation is not practically possible, the statutory test will be satisfied because
a business rescue practitioner can realise Tirisano’s assets without delay, while
the provisional liquidators are prevented from perfecting a sale of Tirisano’s
assets while the Middleburg BR application is pending.
[74] When con sidering the proper interpretation of section 128(1)(b)(iii) of the
Companies Act, it is by now well established that this is an objective exercise,
with the language the starting point and its meaning to be considered within the
immediate statutory contex t and against the achievement of the statutory
purpose.39 The starting point is therefore that the equities of the present, highly
unusual, case cannot determine the objectively correct interpretation of section
128(1)(b)(iii).
[75] The next point to note is that there is nothing in the language of section
128(1)(b)(iii) to suggest that earlier – even much earlier – returns are
38 FA paras 40-41 p 808; RA para 6 p 1204.
38 FA paras 40-41 p 808; RA para 6 p 1204.
39 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) para 18 ; Nu
Africa Duty Free Shops (Pty) Ltd v Minister of Finance and Others 2024 (1) SA 567 (CC) at para 140 .
axiomatically better returns . On the contrary, the well-accepted statutory
purpose of business rescue proceedings is to delay the immediate liquidation of
a company’s assets “ for the sake of rehabilitating companies that have fallen
on hard times but are capable of being restored to profitability or, if that is
impossible, to be employed where it will lead to creditors receiving an
enhanced dividend”.40
[76] I am mindful that liquidation proceedings are ordinarily considered urgent.41
However, in the absence of a statutory provision to that effect, what amounts to
a procedural privilege creditors enjoy when litigating liquidation proceedings
does not translate into a substantive right on their part. Much less does it make
business rescue proceedings the appropriate remedy to overcome delay s in the
liquidation, all the more so where the delay is a direct result of the manner in
which the Companies Act itself regulates the interface between liquidations and
business rescue through section 131(6).
[77] This interpretation is further supported by the fact that the weighing up the
relative merits of liquidation and business rescue proceedings is not provided
for in section 131(7) – the subsection dealing with the conversion of liquidation
proceedings to business rescue proceedings – but in section 128(1)(h), read
with subsection (b)(iii), which provide the definitions that apply to business
rescue proceedings generally. This includes voluntary business rescue by
board resolution (see section 129(1)(b)) which may not be launched if
liquidation proceedings are pending (section 129(2)(a)). In other words, the
legislation envisages instances when a court is called to consider the prospects
of achieving of the secondary goal of business rescue in circumstances where
liquidation proceedings are, by definition, not “immediate”.
[78] In my view, the phrase “ immediate liquidation ” does no more than highlight
[78] In my view, the phrase “ immediate liquidation ” does no more than highlight
one of the key features that ordinarily distinguishes liquidation from business
rescue – with the former aiming solely at the realisation of the company’s
40 Van Staden and Others NNO v Pro-Wiz (Pty) Ltd [2019] ZASCA 7; 2019 (4) SA 532 (SCA) para 22.
41 Imperial Logistics Advance (Pty) Ltd v Remnant Wealth Holdings (Pty) Ltd [2022] ZASCA 143 (24
October 2022) para 30, referring with approval to Van Greunen v Sigma Switchboard Manufacturing
CC [2003] ZAECHC 12 paras 8-10
assets, while in the case o f the latter the company’s assets will only be realised
after the appointed business rescue practitioner has considered the feasibility of
the continued operation of the company.
[79] It follows that the delay in the finalisation of the liquidation proceedings, even
an egregious one, cannot, without more, satisfy this Court that there is a
reasonable prospect that Tirisano’s creditors will receive better returns if
Tirisano is placed in business rescue than if it remains in provisional liquidation
until such time a s the Middleburg BR proceedings are determined and the
liquidation can be finalised.
[80] In argument, Courthiel alluded to the fact that it is the sole applicant in both the
liquidation and the busin ess rescue proceedings, and that neither application is
substantively opposed by any other creditor. It pointed out that , notionally, it
was open to Courthiel to move for a discharge of the liquidation application, 42
with the result that the appointment o f the provisional liquidators – the sole
source of opposition to the current application – would end.
[81] That may be so, although a lack of opposition would not absolve this Court
from satisfying itself that an order placing Tirisano in business rescue can be
lawfully made. Be that as it may, the fact remains that the current application
is and remains opposed, that the provisional liquidators remain in office , and
that Courthiel does not dispute their right to appear and oppose the application.
[82] It follows that in order to succeed in reliance on the secondary goal , too,
Courthiel must show, on the facts of the case and in accordance with the
ordinary rules governing opposed motion proceedings , that there is a
reasonable pros pect of a better return for creditors if Tirisano is placed in
business rescue than would result from the continuation of the liquidation
proceedings and their finalisation in due course.
42 Something also alluded to in the RA para 13 p 1205.
[83] Furthermore, I agree with the provisio nal liquidators when they say 43 that this
enquiry must encompass all creditors, and not only the creditor who happens to
be the applicant in the business rescue proceedings, that is, Courthiel, even if it
is the majority creditor.
[84] Turning then to Courthiel’s case on the facts , it says the following of the
benefit to creditors (emphasis in the original):44
“The benefit to the creditors is that a business rescue may restore the company
to solvency, and result in the payment of what is due to them and will do so
without further delay by the Middelburg business rescue application.”
[85] I have already dealt with the reasonable prospect of a return to solvency above
– no factual foundation beyond speculation has been laid out.
[86] As regards the payment of amounts due to creditors, i f Courthiel were able to
show on its papers reasonable prospect s, within the meaning of t he relevant
provisions, of a business rescue practitioner ultimately realising sufficient
assets to pay all of Tirisano’s creditors what is due to them, I would have no
difficulty in granting the application since the evidence before me suggests that
the provisional liquidators may not be able to achieve such a result by
liquidating Tirisano’s property . But in this respect Courthiel’s application
comes up against the same difficulty it did in relation to the primary goal – it
has failed to lay out a factual foundation.
[87] The starting point is that Courthiel does not suggest that the W itbank property
can or should be kept as a going concern in order to generate an income under
the control of the business rescue practi tioners – before Blumberg AJ Courthiel
was adamant that it would not agree to restructure its mortgage-backed loan to
allow Tirisano to continue running the Witbank property as a going concern ,
and it does not say on the current papers that it has changed its mind . There is
43 AA paras 41, 44-45 pp 1097/8.
44 RA para 63 p 1220.
also nothing to suggest that under the control of a business rescue practitioner
Tirisano will gain access to commercial loans that it did not have previousl y.
The upshot of thi s is that once the Witbank property is sol d, Tirisano will not
have a significant source of income.
[88] Of course, a business rescue practitioner would be able to deal with the
Witbank property in a manner that aims to maximise its value before it is
realised, for example through renovation or other improvements . The same
goes for Tirisano’s other properties. But in the current circumstances,
somewhat ironically, so can the provisional liquidators. It appears from the
evidence that the provisional liquidato rs have effected improvements to the
Witbank property, increased student occupancy, and improved the collection of
rental payments.45 Simply put, the business of Tirisano currently continues.
Courthiel does not say that a business rescue practitioner will be able to deal
with the property in a manner that i s not currently open to the provisional
liquidators pending the return day of the liquidation, aside from fully realising
it.
[89] That leaves the fact that interest is accruing on Courthiel ’s debt at a rate of
approx. R 1.5 million per month until such time as the Witbank property is
realised.46 The provisional liquidators have provided a schedule (provided to
Courthiel as part of the provisional liquidator’s reporting, and included in thei r
further affidavit47) which reflects a monthly income from the Witbank property
that significantly exceeds such interest.
[90] Courthiel has taken the view that it wants repayment of its loans as soon as
possible and is understandably frustrated at the delay in the liquidation
proceedings. But the preference of the majority creditor is not the test . Before
I am able to make an order placing Tirisano in business rescue relying on the
secondary goal , I must be satisfied on the facts before me that there is a
secondary goal , I must be satisfied on the facts before me that there is a
reasonable prospect of a better return for the company’s creditors as a whole if
Tirisano is placed in business rescue. That is not a case made out.
45 Further affidavit Van Zyl paras 14-16 pp 1305-1306.
46 FA para 39 p 808 (the amount is not disputed by the provisional liquidators, and so it is of no import
that in reply Courthiel puts the amount at only R 1 million).
47 “TVZD2” p 1353.
[91] Instead, it is hard to escape the conclusion that what Courthiel is proposing
amounts to an informal winding up of Tirisano that aims to escape the
Companies Act’s provisions which have stymied Courthiel’s efforts to date to
have Tirisano liquidated , rather than to achieving a better return for creditor s
through business rescue. That does not satisfy the statutory test, conflicts with
the principles set out in Oakdene, which I am bound by.
[92] The provisional liquidators have also opposed the application on a number of
other grounds, which I deal with briefly.
[93] First, they say tha t, having regard to the reckless mismanagement of Tirisano,
business rescue is in appropriate. They rely on the factual findings of
Blumberg AJ to that effect (at para s 122.4 and 122.5 of his Judgment ),48 and
additionally highlight transactions they consider void dispositions which have
taken place since Tirisano was placed in provisional liquidation .49 They also
refer to what they say are financial irregularities committed by Tirisano and
Mr Schipper.50 With reference to Brand JA’s discussion in Oakdene, they say
that it is “the investigatory machinery of the insolvency laws ” that is the
appropriate mechanism to investigate and recover funds improperly disbursed
and this will be to the benefit of creditors.51
48 AA para 13 p 1090.
49 AA paras 14-27 pp 1090-1093
50 AA paras 28-32 p 1094
51 AA para 12 pp 1089/9, with reference to para 35 of Oakdene:
“[35] Reference to these transactions of doubtful validity, and the other sinister aspects in the
management of the company’s affairs, lead me to the conclusion that liquidation proceedings
are in fact better geared for the situation that arose in this case. On the respondents’ version the
company has been stripped of all its income and virtually all its assets while under the
management of Dimetrys Theodosiou. These allegations are, of course, d enied by the
management of Dimetrys Theodosiou. These allegations are, of course, d enied by the
appellants. But, as I see it, that is not the point. The point is that these are the very
circumstances at which the investigative powers of the liquidator – under s 417 and 418 of the
1973 Companies Act – and the machinery for the setting asi de of improper dispositions of the
company’s assets – provided for in the Insolvency Act 24 of 1936 – are aimed. In this light I
believe there is a very real possibility that liquidation will in fact be more advantageous to
creditors and shareholders – excluding, perhaps, the appellants – than the proposed informal
winding-up of the company through business rescue proceedings.”
[94] In reply, Courthiel points out that unless Tirisano remains in liquidation, there
is no need to recover payments that are found to have been owing merely to
preserve the concursus creditorum. That is so.
[95] Courthiel accepts, however, that it is likely that some significant payments
were made without a lawful basis and that Tirisano has been mismanaged to the
detriment of creditors, but says that the business rescue practitioner will be able
to investigate the company’s claims and recover funds through ordinary
litigation.52
[96] Significant liquid funds would be required to fund such litigation, and it is not
clear that they will be on hand once the Witbank property is sold. On the other
hand, the “the investigatory machinery of the insolvency laws ” is not an end in
itself bu t serves the proper winding up of companies in the interests of
creditors. None of them have opposed the current application , where relief is
sought that would entail the loss of this protection afforded to them.
[97] Had I found that Courthiel has made out a case on the facts that the statutory
prerequisites for business rescue are met, on balance I would have exercised
my discretion in favour of making an order placing Tirisano in business rescue.
However, since that it is not a finding I am able to make, th e question of my
discretion does not arise.
[98] Lastly, the provisional liquidators also say that the current application cannot
be determined until such time as the provisional liquidators of TGM have
extended powers that will allow them to participate in th ese proceedings on
behalf of TGM. They rely on section 131(3) of the Companies Act, which
provides that “[e]very affected person has a right to participate in the hearing
of an application of this section ”. It is common cause that TGM is an affected
party, being a shareholder of Tirisano.
[99] Courthiel’s response is to say that TGM was served the application while it was
[99] Courthiel’s response is to say that TGM was served the application while it was
not yet in provisional liquidation , and that its directors nevertheless chose not
52 RA paras 35-47 pp 1213-1216.
to oppose the current application within the required timeframes. While this is
correct, the attitude of TGM’s provisional liquidators may be quite different.
[100] On the other hand, the delay by TGM’s provisional liquidator s in seeking
extended powers to litigate on TGM’s behalf – something that had still not
occurred as late as the final hearing of the matter on 17 September 2025 –
suggests other wise. A party’s right to participate in litigation is not
unencumbered by procedure. In the present matter, TGM’s provisional
litigators have had some five months to apply for extended powers that would
allow them to participate in the current application if they considered it
necessary in the interests of TGM. They have not done so, and in those
circumstances there is no infringement of TGM’s right to parti cipate in these
proceedings if the current application is determined.
COSTS
[101] The question of costs arises in relation to the main application and the various
interlocutory applications.
The main application
[102] In respect of the main application, in reply Courthiel sought costs on a punitive
scale against the liquidators on the grounds of very serious allegations of
misconduct. Albeit that Courthiel has not succeeded in the main application, if
its allegations of misconduct on th e part of the provisional liquidators were
proven, they might bear on the question of costs.
[103] The main allegations are that, first, the provisional liquidators opposed the
current application in their own personal financial interest ;53 second, that they
failed to provide reports and be transparent in their administration of the
Witbank property; 54 and third, that the provisional liquidators made an
inappropriate proposal to Courthiel’s attorney, to benefit him in exchange for
53 RA para 16 p 1206.
54 RA paras 17.1-17.3 pp 1207-1208
convincing his client to abandon the current application.55 Courthiel also lists a
number of other respects in which they are dissatisfied with the manner in
which the provisional liquidators have administered the estate – none of th ose
complaints rise to the level of misconduct that might substantiate a punitive
costs order and it is not necessary for me to determine them.
[104] I find Courthiel’s allegations of misconduct not sufficiently substantiated.
Liquidator’s fees are regulated , t here is no evidence that they have been
incurred improperly, and, as appears from what I have said above on the merits,
the provisional liquidator’s opposition to the current application was warranted.
It is clear that Courthiel disagrees, strongly, with the provisional liquidator’s
strategic decisions in the current and other litigation. That alone does not
substantiate bad faith.
[105] As regards transparency, the provisional liquidators p laced on record their
ongoing reports, which dispel Courthiel’s accusations. The reports are
substantial and engaging.
[106] Lastly, as regards what Courthiel implies was a bribe of its attorneys, the
provisional liquidators convincingly set out the context in which they offered to
engage Courthiel’s preferred attorneys, and show that this suggestion
ultimately originated with Courthiel.
[107] On the papers before me, I find no grounds to make a finding of improper
conduct against the provisional liquidators , and no reason to depart from the
ordinary rule that costs should follow the result. The parties were agreed that
costs on a scale C are warranted.
The interlocutory applications
[108] The provisional liquidators applied for condon ation for the late filing of their
answering affidavit on the day of the first hearing on 24 April 2025 . They
frankly conceded that it is open to this Court to apply the healing balm of a
costs order in the event that condonation is granted, as it was.
55 RA para 17.8 p 1209.
[109] The explanation for the extreme lateness of the answering affidavit was terse.
The provisional liquidators relied on the provisional winding up of TGM , of
which Courthiel was informed on 18 March 2025 and which they say might
have moved Courthiel to abando n the current application ; that they were
informed on 22 April 2025 that there would be no opposition to the current
application by an unnamed “ institutional creditor”; and that on 23 April 2025
they were informed that TGM’s provisional liquidators intende d to withdraw
the Middleburg BR application – something that has still, to date, not
happened.
[110] None of these facts have a bearing on the merits of the current application
which is unrelated to TGM’s provisional liquidation . It appears from the
papers that it was, or should have been, clear to the provisional curators well
ahead of the hearing that Courthiel intended to proceed with the current
application regardless of any action which TGM’s provisional liquidators
might take in the future . The provisional liquidators do not explain why the
answering affidavit could not have been filed , if not in accordance with the
rules, then at least significantly earlier than it was – thereby obviating the need
for the postponement that f ollowed. In those circumstances, the provisional
liquidators must bear the wasted costs of 24 April 2025 and it is appropriate
that they bear those costs in a personal capacity.
[111] As regards the striking out application , both sides had substantial success and
there will be no order as to costs in relation to that application.
[112] Lastly, as regards the rule 6(5)(e) application, Courthiel has succeeded in the
face of the concession by the provisional liquidators , rightly made, that the
evidence sought to be int roduced included new and material facts. Courthiel
should be awarded the costs of that application.
ORDER
[113] In the premises I make the following order:
1. The application for business rescue is dismissed with costs on a scale C,
such costs to include the costs of two counsel where so employed, subject
to the following:
a. The second to fourth respondents are ordered to personally and
jointly and severally pay the wasted costs occasioned by the la te
filing of their opposing affidavit, including the wasted costs of
appearance on 24 April 2025.
b. There is no order as to costs of the striking out application.
c. The second to fourth respondents are ordered to pay party-party
costs on a scale B occasioned by the application under rule 6(5)(e).
2. The rule nisi is extended to, and the application for final liquidation is
postponed for hearing on, 27 November 2025.
_____________________________
K S SALLER
ACTING JUDGE OF THE HIGH COURT
Appearances